Ex-Vivendi bosses Messier and Bronfman convicted by French court

Warner Music CEO Bronfman Jr. - Facing French Heat

Warner Music CEO Bronfman Jr. – Facing French Heat

Jean-Marie Messier – the Ex Chairman and CEO of Vivendi, a group company of Warner Music and the current Chairman and CEO of Warner Music Group – Edgar Bronfman, have been convicted by a Paris court of causing the company near bankruptcy after they undertook expensive acquisition of companies totaling $77 billion.

Bronfman has been fined €5 million while Messier has been asked to pay €150,000 by a three judge panel. The fine relates to Messier misleading investors on Vivendi’s financial health while being the CEO of the company and Bronfman gained illegally from trading on insider information.

“Messier appeared to have had, on the points that were important to the rise in the Vivendi Universal shares, statements of a nature to mislead investors”, the judgment said. It transpires that Messier “had awarded to himself, while the company was in grave difficulty, very large amounts, of a type to exacerbate its financial problems”, the order added.

Bronfman has been awarded a suspended 15 month jail-term while Messier’s suspended jail-term extends to three years. Guillaume Hannezo – a former Chief Financial Officer, also received 15 months suspended jail-term and was fined €850,000.

Messier has been convicted of misguiding investors in 2002 about Vivendi’s financial health, while in reality it had €35 billions of debt on its balance sheet. The court also ordered Messier to compensate minority shareholders.

Messier had cut deals to acquire nearly 23 businesses during his tenure, pushing the company on the verge of bankruptcy. Bronfman was convicted of exercising stock-options based on insider information and wrongfully gaining $12.8 million, when he was the vice-president of Vivendi.

Messier had been previously fined by the French Stock Market regulator of €1 million, which was later reduced to €500,000. His lawyer said he will appeal against today’s decision.

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